Adi­das Taps the A-list

By align­ing with cul­tural icons at least as much as ath­letes, Adi­das has re­found its foot­ing.

Fast Company - - Contents - By Mark Wil­son

How cre­ative part­ner­ships with Kanye West, Phar­rell Wil­liams, and more are boost­ing the brand to new heights.

An onyx stage catches fire and three per­form­ers, sil­hou­et­ted in the blaze, be­gin to sing from be­hind the flames. You can hear Kanye West’s voice, but you can’t make out his face. The first glimpse of him, pok­ing out of the fire, is a shoe.

But not just any shoe: specif­i­cally, a white Adi­das Ul­tra Boost, which un­til this mo­ment—the Billboard Mu­sic Awards in May 2015— has never been worn in pub­lic.

West be­gins his next song and leaps through the flames. He’s dressed all in black ex­cept for the two white Ul­tra Boosts, which hang in the air like ex­cla­ma­tion points. “What hap­pens next? Ev­ery sin­gle store that had [Ul­tra Boosts] cleared out within the hour,” says Yu-ming Wu, founder of shoe-cul­ture net­work Sneaker News, with only a touch of hy­per­bole.

Never mind that the flames weren’t real, or that, after more than a decade as the sec­ond-largest

sports brand in the U.S., Adi­das had re­cently fallen be­hind Under Ar­mour, whose CEO, Kevin Plank, had called the Ger­man brand his “dumb­est com­peti­tor.”

Adi­das—with West—had cre­ated a mo­ment. Wu com­pares it to Michael Jor­dan’s 1988 dunk from the free throw line, which made a le­gend out of Nike’s Air Jor­dan III: West’s fiery Ul­tra Boost de­but turned Adi­das’s Boost tech­nol­ogy into a cul­tural touch­stone.

By fall 2016, Adi­das had over­taken Under Ar­mour. The com­pany’s North Amer­i­can rev­enue soared by 30% from 2015 to 2016, with sales of Ul­tra Boosts leaping 98%. And while Adi­das doesn’t break out many spe­cific num­bers, the com­pany cred­its Ul­tra Boosts for much of its re­cent growth. In­deed, the emer­gence of the line— and Adi­das’s on­go­ing re­la­tion­ship with West (which in­cludes the singer’s Yeezy-branded Boost shoes and ap­parel)—re­flects a strat­egy that the Ger­man sports­wear com­pany has been de­vel­op­ing for sev­eral years, one that re­lies on celebri­ties as much as ath­letes.

With only one-quar­ter of the Amer­i­can pub­lic buy­ing sneak­ers for their in­tended ath­letic use, ac­cord­ing to mar­ket-re­search firm NPD Group, Adi­das has been turn­ing to cul­tural in­flu­encers as part­ners, drop­ping new shoe styles with in­creas­ing speed. This spring, fash­ion de­signer Alexan­der Wang re­leased two cap­sule col­lec­tions of his AW Run shoes in as many months. Mu­sic im­pre­sario Phar­rell Wil­liams churns out reg­u­lar it­er­a­tions on his blocky, Lego-es­que NMD line, which sold al­most a half-mil­lion units on­line and in stores in a sin­gle day in March 2016, with peo­ple lin­ing up out­side of re­tail lo­ca­tions from Bangkok to New York. And West has now cre­ated six mod­els for the Boost brand. (The NMD and Boost lines have be­come so pop­u­lar with sneak­er­heads that Daishin Sugano, co­founder of the shoe re­sale app Goat, re­ports that Adi­das climbed from just 10% of his sales to al­most 40% in two years.) These kinds of col­lab­o­ra­tions—along with Adi­das’s own in-house ef­forts—rep­re­sent a bold de­par­ture for the com­pany, which is now treat­ing shoes as fast fash­ion: stylish, re­spon­sive to trends, and en­gi­neered to hit the mar­ket quickly.

Adi­das laid the foun­da­tion for its turn­around dur­ing a par­tic­u­lar low point. Through­out 2013, stores had been or­der­ing less and less mer­chan­dise from Adi­das’s up­com­ing sea­sons, and the com­pany be­gan warn­ing in­vestors quar­terly. Shares plunged in Au­gust of 2014, and within five months Under Ar­mour had taken the No. 2 spot in the U.S.

Chief mar­ket­ing of­fi­cer Eric Liedtke, a 20-plus-year veteran of the com­pany, teamed up with the then-newly pro­moted global cre­ative di­rec­tor Paul Gau­dio in mid-2014 to lead a mi­gra­tion of the cre­ative team from Adi­das’s head­quar­ters in the Bavar­ian town of Her­zo­ge­nau­rach, Ger­many, to Port­land, Ore­gon—right in Nike’s back­yard. While Adi­das doesn’t frame it this way ex­plic­itly, the com­pany seems to have taken its cue from the mar­ket leader. “[The sneaker] in­dus­try is born of U.S. cul­ture,” says Gau­dio. The U.S., after all, rep­re­sents 45% of the $55 bil­lion global sneaker mar­ket.

Adi­das quickly be­came a transat­lantic, co-head­quar­tered brand. De­sign, ad­ver­tis­ing, and com­mu­ni­ca­tions leads were re­lo­cated to Amer­ica, while Ger­many was tapped to han­dle ma­te­ri­als and man­u­fac­tur­ing. “The Amer­i­cans are bet­ter sto­ry­tellers and, for our in­dus­try, have a bet­ter aes­thetic sense,” Liedtke ex­plains. “The Ger­mans, in broad terms, are very

“Amer­i­cans are bet­ter sto­ry­tellers and, for our in­dus­try, have a bet­ter aes­thetic sense,” says Adi­das chief mar­ket­ing of­fi­cer Eric Liedtke.

good in en­gi­neer­ing, in­no­va­tions, get­ting stuff done.”

And that wasn’t the only change. Adi­das’s de­ci­sion-mak­ing hi­er­ar­chy shifted too. In Port­land, sep­a­rate cre­ative si­los were es­tab­lished for sports such as foot­ball, bas­ket­ball, and run­ning (again, sim­i­lar to Nike), al­low­ing teams to de­velop prod­ucts tai­lored to their spe­cific and evolv­ing cus­tomers. Both a gen­eral man­ager and a de­signer sit atop each silo. “If the GMS are driv­ing the car, the cre­ative di­rec­tors are nav­i­gat­ing where to go,” says Liedtke. The groups share core tech­nol­ogy, ma­te­ri­als, and re­tail strat­egy with each other, but with their new au­ton­omy, they’re now able to de­velop shoes in weeks rather than months.

This speed fa­cil­i­tates the com­pany’s col­lab­o­ra­tions with out­side de­sign­ers. For more than a decade, Adi­das had been ex­plor­ing cre­ative part­ner­ships with de­sign­ers such as Yo­hji Ya­mamoto and Stella Mccart­ney on high-fash­ion and fit­ness lines. But it wasn’t un­til the com­pany re­fo­cused its cre­ative process in the U.S. that it could move with enough speed and au­thor­ity to make a wider range of col­lab­o­ra­tions mean­ing­ful at scale. Now, Adi­das tests the mar­ket of a tech­nol­ogy—like Ul­tra Boost—with­out a celebrity name at­tached, which takes six months to a year. Then the com­pany brings in a cre­ative part­ner, such as West, to add a sig­na­ture touch and make the prod­uct line rel­e­vant to cul­ture. “Some [sports brands] talk about how hard work equals win­ning. Some talk about mind over mat­ter,” says Liedtke, in a not-so-veiled nod to Nike and Under Ar­mour cam­paigns. “We like to talk about imag­i­na­tion—imag­in­ing what the fu­ture could be.”

Ath­letes such as the bas­ket­ball player James Har­den and NFL cor­ner­back Mar­cus Pe­ters re­main prom­i­nent in Adi­das’s mar­ket­ing. “Ev­ery­thing starts from sport,” says Gau­dio. “With­out it, we don’t have any life­style of­fer­ings.” Even so, Adi­das’s ros­ter of cre­ative part­ners is sig­nif­i­cant, from West and Wil­liams to rap­per Pusha T and Bel­gian fash­ion de­signer Kris Van Ass­che. Wil­liams al­most sin­gle-hand­edly brought the com­pany’s 1973 Stan Smith ten­nis shoe back from re­tire­ment when he wore them to the 2015 Gram­mys and then cham­pi­oned Adi­das’s throw­back Su­per­star fran­chise. His boxy, col­or­ful NMD line is cur­rently Adi­das’s most ag­gres­sive new look since the Ul­tra Boosts.

Adi­das is also de­vel­op­ing a broader cre­ative strat­egy that goes be­yond Port­land. This spring, it opened the Brook­lyn Farm, a store and cre­ative studio that en­gages lo­cal de­sign­ers for 10-month-long stints. Gau­dio sees the out­post as an op­por­tu­nity to ac­cel­er­ate prod­uct and re­tail in­no­va­tion. “It is also about con­nect­ing with young cre­ators, star­tups, stu­dents, and in­flu­encers,” he says. “It is about get­ting out of our ivory tow­ers and be­ing on the ground, liv­ing and breath­ing cul­ture and cre­ativ­ity.”

Mean­while, the com­pany is re­struc­tur­ing again—this time on the man­u­fac­tur­ing side. Adi­das has al­ready opened an ex­per­i­men­tal “Speed fac­tory” in Ger­many and has a sec­ond one planned for At­lanta. The fac­to­ries treat the shoe as a dig­i­tal prod­uct, de­ploy­ing new pro­duc­tion meth­ods such as mo­tion­cap­ture (to test how new ma­te­ri­als re­spond to move­ment) and 3-D printing. The com­pany plans to pro­duce as many as a mil­lion pairs of shoes at Speed fac­to­ries by the end of 2018—open­ing up more po­ten­tial for cre­ativ­ity, and get­ting shoes into sneak­er­heads’ hands even faster.

“Some [sports brands] talk about how hard work equals win­ning,” says Liedtke. “We talk about imag­in­ing what the fu­ture could be.”

Step­ping out Last fall, de­signer Alexan­der Wang sur­prised view­ers at his New York Fash­ion Week show with an Adi­das Orig­i­nals col­lec­tion that in­cluded shoes and clothes.

Hype man Kanye West’s de­but of the white Adi­das

Ul­tra Boost dur­ing a series of per­for­mances in spring 2015 led to a sales frenzy.

1) Phar­rell Wil­liams de­signed the Hu NMD, re­leased in Septem­ber 2016. 2) Adi­das’s new Ul­tra Boost X was de­signed in-house. 3) Kanye West’s Yeezy Boost 350 from 2015 is now a col­lec­tor’s item. 4) Fash­ion de­signer Kris Van Ass­che gave a plaid spin to his 2015 Ul­tra Boost. 5) Alexan­der Wang’s col­lec­tion in­cludes a de­con­structed bas­ket­ball shoe.

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